Wall Street Weekly Preview: U.S. Employment Data Coming Soon, AI Disruption Wave Looms Over the Market

Next week, the potential disruptive impact of artificial intelligence (AI) on the business sector will continue to keep the U.S. stock market on edge, as Wall Street seeks more information on how this emerging technology will affect the economy. The monthly U.S. employment report will be released next week, along with quarterly earnings reports from semiconductor giant Broadcom and other companies.

Recently, AI’s disruptive potential has attracted investor attention, with stocks in industries such as software, wealth management, and real estate services falling due to concerns over business disruptions. Kristina Hooper, Chief Market Strategist at Man Group, said, “There is still a lot of uncertainty about who might become victims and who might benefit by leveraging AI rather than being replaced. I think this will continue to be an issue.”

Although technology stocks have struggled, gains in other sectors like industrials and consumer goods have helped support major indices this year. Last Friday, weakness in tech and financial stocks dragged down the major averages, with the S&P 500 and Nasdaq Composite posting their largest monthly percentage declines in nearly a year for February. As of last Friday, the S&P 500 was up 0.5% in 2026.

John Velis, a macro strategist at BNY Mellon, said, “The U.S. stock market is in the late stages of the cycle, trying to find winners and losers in this new disruptive technology, essentially at a standstill.”

The U.S. employment report for February is expected to be released on March 6, with forecasts of a 60,000 increase in jobs. The January report previously showed a gain of 130,000 jobs, with the unemployment rate falling to 4.3%. The January report eased concerns about a weakening labor market, but Hooper noted, “We also see signs of a softening in the job market in 2025, so the question is, where are we headed next?”

Investors will also look for clues from the report on when the Federal Reserve might cut interest rates again. Federal funds futures indicate the next rate cut could occur in June or July, as Fed Chair Jerome Powell’s term ends in May, with his potential successor, Kevin Wirth, possibly taking over. The Fed cut rates last year amid a softening employment backdrop but paused its easing cycle in January. Strong employment data could lead investors to delay expectations for further rate cuts. Lower interest rates are typically associated with higher stock and asset prices.

Velis from BNY said, “Market reactions to employment data will reveal which factors are more important to stock investors. For example, if strong data is followed by weak stock performance, it will be a significant signal that the ‘interest rate argument’ is important.”

Next week will also see reports on manufacturing and services activity, with retail sales data for January expected to be released on March 6. In addition to Broadcom’s quarterly report, retailers like Best Buy and Target are also expected to release earnings. Wall Street is eager for any evidence of AI’s impact on the economy, whether positive or negative. Atlanta Fed President Raphael Bostic told Reuters this week that as companies deploy AI tools to save labor, the U.S. may be entering a period of higher structural unemployment.